Is Privity Dead? Should It Be?

David F. Tavella

Abstract

Privity, a concept that is over 150 years old, may have worked well in the 19th Century, seems outdated in a time national accounting firms and law firms. In the 19th and early 20th Centuries, when a person may have gone to an agent, accountant, or other service provider for advice, there was no thought that the advice would be distributed to potentially millions of people with the possibility of billions of dollars in losses for negligent performance. Today, this is common in the accounting and insurance industries. The question is whether a concept, even one firmly rooted in American Jurisprudence, designed for 19th Century business is still effective in the 21st Century. It is clear from current conditions that the historical concept of privity is no longer viable in today’s legal climate.